Government attacked as Pacifica Shipping 'bleeds'

By PAM GRAHAM

Pacifica Shipping is cutting another ship from its fleet and blaming the Government for letting foreign ships operate "tax free" around New Zealand.

The Spirit of Enterprise will be pulled from service before Christmas, leaving the company with just two ships and no services to Dunedin or Tauranga.

The move leaves Dunedin businesses with no seafreight option for shipping containers to Auckland. About 120 containers a week are likely to end up on rail as a result.

The removal of the Spirit of Enterprise from service affects 32 workers and follows the withdrawal of the Spirit of Vision from service in May.

The Spirit of Competition will still link Lyttelton and Wellington overnight and the Spirit of Resolution will provide a weekend Auckland-Lyttelton service and a Nelson service.

The company, which owner Skeggs Group failed to sell this year, wants the Government to reinstate cabotage, whereby only New Zealand ships can work from local port to local port.

Transport Minister Paul Swain has promised a Government response to the Shipping Industry Review which canvassed the issue but did not agree on a policy. The review is now three years old.

A spokeswoman from Swain's office said the response, which had been expected in August, could be this year.

Pacifica chief executive Rod Grout said there had been a decline in the number of local ships working the coast, and subsidised foreign ships threatened the long-term viability of both domestic shipping operators and Tranz Rail.

"Our remaining ships are not dead in the water by any means, but we are being allowed to bleed to death by Government inaction," he said.

New Zealand Shipping Federation manager Paul Nicholas said foreign ships were dumping capacity on the local market, forcing prices below cost.

He called on the Government to ban foreign ships from coastal trade.

"The solution is clear: match the rest of the world by allowing local operators to move ships between any ports, and restrict foreign shipping operators to exports and imports."

New Zealand's coastal shipping was opened up to foreign operators nine years ago.